Asian markets faced widespread pressure today, with all three major A-share indices closing in the red as declining stocks outnumbered advancers across the board. Total turnover across Shanghai, Shenzhen, and Beijing reached 2.02 trillion yuan, up 129.1 billion yuan from the previous session.

As the market weakened, the banking sector stepped up as a defensive bulwark, with 40 of 42 banking stocks closing higher and China CITIC Bank hitting an all-time high. The food and beverage sector bucked the trend with strong performances across both baijiu and consumer staples, as Kweichow Moutai led A-share capital inflows with net main fund inflows exceeding 1.4 billion yuan. Non-ferrous metals continued to outperform the broader market, with Baiyin Nonferrous and Hunan Silver both hitting daily limit-up despite the weak tape.

On the flip side, computing hardware stocks saw broad declines, with the "Yi-Zhong-Tian" trio of optical module leaders suffering significant losses. What exactly is driving this pullback? Why are Asian markets correcting so broadly? And why has the tech sector become the hardest hit? Four key developments may offer answers.

First, Samsung Electronics' shareholder return program disappointed market expectations, particularly when contrasted with rival SK Hynix's aggressive buyback-and-cancellation scheme. Capital voted with its feet, pressuring Samsung's stock and transmitting negative sentiment across global memory and tech sectors. Second, Alibaba announced plans to place 80 billion HKD in new shares, with proceeds fully directed toward AI infrastructure. The market interpreted this as a signal that even industry giants require substantial external financing—suggesting that core business free cash flow alone cannot sustain the intensity of AI capital expenditure competition. This suppressed risk appetite in the tech sector and spread pessimism outward. Third, Nvidia has issued price increase notices to customers, implying that downstream cloud providers and enterprise clients will face higher AI computing procurement costs. Fourth, on the macro front, the U.S. suddenly imposed a 50% tariff on Canadian goods shipped to the U.S., prompting Canada to announce retaliatory tariffs on American products.

Looking ahead, two major events this week could significantly influence market direction. On Wednesday, Nvidia will release its latest earnings report, and on Friday, Federal Reserve Chair Warsh will deliver a policy speech at the Jackson Hole Global Central Bank Symposium in Wyoming. The former will test whether AI computing demand can still support the high-valuation narrative, while the latter will shape interest rate trajectories and liquidity expectations.

According to Industrial Securities, over the medium-to-long term, even if slow-moving variables such as fiscal expansion and AI-driven bond issuance crowding out effects are slow to ease—potentially pushing global rates higher—fundamentals and industrial trends remain the core drivers of the current AI bull run. The impact of rising U.S. Treasury yields on equities is primarily felt through the denominator side of valuations. Historical experience shows that during bull markets led by major industrial trends, sufficiently strong earnings growth on the numerator side can partially offset the drag from rising risk-free rates, allowing stock prices to advance against the headwind of denominator pressure.

The firm added that high-quality hard tech assets are still likely to be the core force leading market repair going forward. Within this space, it continues to favor optical modules, PCB, fiber optic cables, and other North America-bound computing chain segments that have led this recovery and still offer attractive risk-reward. Additionally, it highlights other prosperity themes not yet fully priced in: non-ferrous metals, AI upstream equipment, innovative drugs, new energy (battery storage, power grids), and oversold AI upstream materials (minor metals) within the resources complex.

Now let's examine the trading and fundamentals of sector-specific ETFs focused on banking, food and beverage, and the ChiNext AI theme.

First, why has the banking sector repeatedly shown independent strength amid A-share turbulence? With nearly 4,000 stocks falling across the market, banks rallied against the trend all day, with 40 of 42 banking stocks closing higher. Chongqing Rural Commercial Bank rose over 3%, while Wuxi Bank, Xiamen Bank, Huaxia Bank, Ruifeng Bank, and China CITIC Bank all gained over 2%, with China CITIC Bank setting a record high. The Bank ETF Huabao (512800), which tracks the sector's overall performance, showed notable strength.

As of August 24, 2026, the weightings of Chongqing Rural Commercial Bank, Wuxi Bank, Xiamen Bank, Huaxia Bank, Ruifeng Bank, and China CITIC Bank in the CSI Bank Index stand at 1.12%, 0.27%, 0.32%, 1.39%, 0.31%, and 1.30%, respectively. During the recent pullback in hot tracks like hard tech, banks have repeatedly delivered independent defensive moves.

The banking sector's resilience in weak markets may stem from multiple factors. First, fundamentals are showing positive stabilization signals. Among the four city commercial banks that have disclosed Q2 results—Bank of Ningbo, Bank of Jiangsu, Bank of Nanjing, and Bank of Chongqing—pre-provision operating profits are all in the 10%-16% range, with strong year-on-year net interest income growth laying a solid foundation for full-year performance. Additionally, data from the National Financial Regulatory Administration shows that commercial banks' net interest margin stood at 1.41% at the end of Q2 2026, up 1 basis point quarter-over-quarter—the first sequential quarterly increase since Q1 2022, marking a turnaround after more than four years.

Second, high dividend yields provide "bond-like" allocation value. As of August 21, the CSI Bank Index dividend yield stood at 4.27%, representing a 257 basis point premium over the 10-year government bond yield of 1.7%. A-share listed banks distributed a record 645.637 billion yuan in dividends for fiscal 2025. Stable and sustained dividend returns hold strong appeal for long-term capital. The formal implementation of the Insurance Company Asset and Liability Management Measures is expected to further boost insurers' appetite for high-dividend assets, and mainstream bank stocks—with their massive market capacity, robust dividend stability, and current dividend yields of 4%-6%—stand to benefit from sustained insurance capital accumulation.

Third, low valuations offer potential upside. As of August 21, the CSI Bank Index traded at just 0.68 times price-to-book (LF), sitting at the 44.72% percentile over the past decade, with all 42 banking stocks trading below book value, providing ample safety margin and room for recovery.

Feng Chencheng, fund manager of Bank ETF Huabao (512800), believes the equity market continues to play out a "style rebalancing" seesaw dynamic. This seesaw affects the pace of repair but not the direction—even if tech stocks rebound, the banking sector's valuation repair process remains intact over the medium term. The banking sector's monthly chart still shows upward momentum, and Q2 fund positioning in banks fell to historic lows, with the style rebalancing process accompanied by rebalancing of previously underweighted positions.

China Securities notes that banks are relatively resilient holdings in lackluster markets and don't underperform in bull markets either. During three phases of market declines in 2015-2016, 2018-2019, and 2021-2024, banks consistently held up better than the market, with declines significantly smaller than the CSI 300. On the capital front, National Team share reductions are nearing completion, broad-based index fund sizes have returned to pre-2024 rescue levels, and disturbance from state-affiliated institutional capital has largely dissipated. In the short term, there's a seesaw effect with tech, but long-term pricing remains anchored around ROE and dividends.

Bank ETF Huabao (512800) passively tracks the CSI Bank Index, with constituent stocks encompassing all 42 A-share listed banks, making it an efficient tool for tracking the sector's overall performance. Off-exchange investors can also access the linked fund (006697).

Second, baijiu leader responds to market value management plans. The food and beverage sector rose against the market tide, with both baijiu and consumer staples delivering standout performances. At the close, Andeli hit limit-up, Kuaijishan rose 8.31%, and Kweichow Moutai, Yingjia Gongjiu, and Guyue Longshan all gained over 2%, while Wuliangye, Shanxi Fenjiu, and Yanghe all closed in positive territory.

As of August 24, 2026, the weightings of Andeli, Kuaijishan, Kweichow Moutai, Yingjia Gongjiu, Guyue Longshan, Wuliangye, Shanxi Fenjiu, and Yanghe in the Sub-segment Food Index stand at 0.28%, 0.32%, 15.26%, 0.84%, 0.47%, 13.56%, 5.56%, and 2.32%, respectively.

On the news front, on the afternoon of August 21, Kweichow Moutai held its 2026 semi-annual results briefing at the SSE Roadshow Center. Chairman Chen Hua and Acting General Manager Wang Li both attended and answered questions on-site—marking the first time in recent years that Moutai's chairman participated in an investor-facing results briefing. During the session, management proactively addressed market value management plans, noting that the company is systematically formulating a comprehensive three-year (2027-2029) market value management framework.

Regarding the market's key concern over "rising revenue but falling net profit," Moutai responded that market-oriented reform measures are being implemented in an orderly manner, with overall market sales conditions and the product pricing system's "fundamental stability" maintained. Moutai liquor and sauce-flavor series products both saw sales volume growth in H1, reflected in steady revenue growth that met company expectations.

From a valuation perspective, the food and beverage sector remains at historical lows. Data shows that as of the last trading day (August 21), the Food & Beverage ETF Huabao (515710)'s underlying Sub-segment Food Index traded at 19.93 times P/E, sitting at a low 7.45% percentile over the past decade, highlighting compelling medium-to-long-term allocation value.

Looking ahead, CSC Financial states that the baijiu industry is in a bottoming phase, with distilleries generally shifting toward C-end operations, and some regional players may post positive earnings growth in Q2. Leading distilleries offer attractive dividend yields, and improving Moutai wholesale prices could catalyze valuation repair. It recommends focusing on leading baijiu names and regionally strong players with solid fundamentals and high dividends.

Kaiyuan Securities notes that as channel inventory gradually clears, improved sell-through momentum should eventually translate to reported results. A sector-wide reversal for baijiu will take time, but quality regional targets already offer compelling entry points, and investors could proactively seize allocation opportunities during the bottoming phase.

For one-click exposure to core food and beverage assets, Food & Beverage ETF Huabao (515710) tracks the CSI Sub-segment Food & Beverage Industry Theme Index, with baijiu leaders accounting for nearly 50% of holdings. Off-exchange investors can also access the sector through linked funds (A-class 012548, C-class 012549).

Third, the three optical module giants tumbled collectively. Computing hardware stocks weakened broadly, with optical module CPO leaders suffering deep losses. Tianfu Communication fell 8.63%, Zhongji Innolight dropped 7.72%, and Eoptolink declined 6.79%. The high-optical ChiNext AI ETF Huabao (159363) once again technically retraced to its 20-day moving average, with capital continuing to monitor entry opportunities.

On the reasons for the decline, Industrial Securities attributes recent global tech volatility to, on one hand, the rapid rise in overseas ultra-long-duration bonds, and on the other, Anthropic's latest ARR missing expectations. However, these concerns are expected to begin easing around mid-to-late September, which will mark an important decisive window for the tech sector.

In terms of positioning, Industrial Securities emphasizes that fundamentals remain the core thread. First, after the digestion of valuations and positioning, the fundamental beta has returned since August, with earnings once again supporting stock prices. Second, with global rates trending higher, the market will focus more on fundamental certainty in structural choices. Third, next week marks the intensive A-share interim report disclosure period, and overseas tech giants are also approaching earnings validation.

The firm maintains that high-quality hard tech assets remain the core force likely to lead market repair. Within this space, it continues to favor optical modules, PCB, fiber optic cables, and other North America-bound computing chain segments that offer compelling risk-reward at current levels.

For exposure to the high-optical theme, investors may consider ChiNext AI ETF Huabao (159363) and its off-exchange linked funds (A-class 023407, C-class 023408), which focus on optical module CPO leaders while also covering AI applications. The underlying index's top three constituents—Eoptolink (13.77%), Zhongji Innolight (13.17%), and Tianfu Communication (10.56%)—collectively account for approximately 40% of the index, representing the core standard-bearers of AI computing power.

Fee rates are detailed in respective fund legal documents. Data sourced from Shanghai and Shenzhen exchanges, as of August 24, 2026. Investors are reminded that market volatility may be significant in the near term, and short-term gains or losses do not predict future performance. Please invest rationally based on your own capital position and risk tolerance, with close attention to position sizing and risk management.

Institutional views referenced from: China Securities' August 24 report "Banking: Value of Bank Dividend Stocks—Absolute Returns from Fundamentals and Investment Perspectives"; CSC Financial's August 18 report "Emphasizing Moutai's Multi-Round Price Increases and Positioning Bottom Value, Focus on Interim Report Surprises"; Kaiyuan Securities' August 23 food & beverage weekly "Sector Fundamentals Diverging, Focus on Structural Allocation Opportunities"; Industrial Securities' August 23 report "September Will Be the Key Decisive Window for Tech."

Risk disclosure: Bank ETF Huabao passively tracks the CSI Bank Index (base date December 31, 2004; launched July 15, 2013). Food & Beverage ETF Huabao passively tracks the CSI Sub-segment Food & Beverage Industry Theme Index (base date December 31, 2004; launched April 11, 2012). ChiNext AI ETF Huabao passively tracks the ChiNext AI Index (base date December 28, 2018; launched July 11, 2024). Index constituent composition adjusts according to index methodology, and backtested historical performance does not indicate future index performance. Stocks mentioned are solely objective displays of index constituents and do not constitute stock recommendations or represent the fund manager's or fund's investment direction. Any information appearing herein (including but not limited to stocks, commentary, forecasts, charts, indicators, theories, or any form of expression) is for reference only. Investors must bear responsibility for their own investment decisions. Additionally, any views, analyses, or forecasts herein do not constitute investment advice to readers, and Huabao Fund bears no liability for direct or indirect losses arising from use of this content. Investors should carefully read fund legal documents including the Fund Contract, Prospectus, and Fund Product Information Summary to understand risk-return characteristics and select products matching their risk tolerance. Past performance does not predict future results, and performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Per fund manager assessment, Bank ETF Huabao and Food & Beverage ETF Huabao carry a risk rating of R3-medium risk, suitable for balanced (C3) and above investors. ChiNext AI ETF Huabao carries a risk rating of R4-medium-high risk, suitable for aggressive (C4) and above investors. Suitability matching opinions are subject to sales institution determinations. Sales institutions (including the fund manager's direct sales and other sales channels) evaluate fund risk per applicable regulations; investors should monitor suitability opinions issued by the fund manager in a timely manner. Suitability opinions across sales institutions may differ, and risk rating results from sales institutions shall not be lower than the fund manager's assessment. Differences exist between risk-return characteristics described in fund contracts and fund risk ratings due to different considerations. Investors should understand fund risk-return profiles and choose fund products carefully based on investment objectives, horizons, experience, and risk tolerance, bearing risks themselves. CSRC registration of these funds does not constitute substantive judgment or guarantee of their investment value, market prospects, or returns. Fund investment requires caution.